Unlocking the Back-Office: How AI and Modern Tech Can Turn Data into Competitive Advantage

A recent study by Coalition Greenwich (a division of CRISIL) mentioned that AI can help improve investment decisions.

But, firms need the right API tools to use AI across different types of market data.

Desktop solutions are still common, but old methods like FTP and SFTP will likely decline.

These methods are slow, risky, and require manual work, which is causing their downfall.

While the study looked at market data, legacy systems are widely used across capital markets.

They are common in post-trade operations, especially in the middle and back office.

These areas get less attention because they are seen as cost centers.

Front-office work and new products get more focus unless big changes are needed for regulations.

I think by ignoring back-office now, firms are missing out on a big chance to gain an edge.

Good data is key for better insights.

This is even more important now with AI tools.

The back-office cannot delay investing in modern technology.

As Sandeep Sahai from Clearwater Analytics said in a recent post, technology investment is important for success. Financial firms rely on technology, so it’s key to keep investing in both technology and people.

Also, sell-side firms adapt to new tech faster than buy-side firms given their nature of business.

But, it's time for the buy-side to rethink its tech plans.

The future is in self-service exception based workflows and 'pay-per-use' model for operations.

This change will need modern 'cloud' systems and adopt APIs to integrate with other systems/tools.

Firms will also need advanced market risk tools for real-time insights.

Business Intelligence(BI) tools for such insights will help analyze not just market risk, but performance, exposures, and holdings across portfolios.

And finally, to support multi-asset portfolios, firms must refine theeir existing data management framework.

This is crucial as private assets and fixed income grow in importance.

With better systems, firms can be more efficient.

The main benefit is that firms can leverage AI to develop new tools for smarter investment decisions, transforming 'data' into 'value.'

The back-office has a chance to use its data to build new services and become a revenue center.

The question is:

Are post-trade teams ready for this change?

Now is the time for them to step up.

#buyside #marketrisk #businessintelligence #datamanagement #ai